How to Prevent Major Corporations from Stealing Your Trademark

If anyone can attest to the nightmare of waging a trademark battle against a corporate giant, it’s Amy Brooks, a Rochester-based entrepreneur. Ms. Brooks is the proprietor of Bubbles by Brooks, a distributor of therapeutic soaps for cancer patients. After surviving cancer treatment herself, Brooks began handcrafting skin care and soap products that minimize irritation for cancer patients undergoing therapy. Running the business out of her home, Brooks has managed to nurture her brand over the past 10 years into a modest but profitable operation with annual sales of $100,000.

Imagine Brooks’ confusion and fear when she received a letter one day from clothing juggernaut Brooks Brothers demanding that she withdraw her application to register the trademark “Bubbles by Brooks.” Brooks Brothers told her that, although “Brooks” is her surname, she does not have the right to infringe on their mark or compete with their products. Attorneys told Ms. Brooks that it would cost about $200,000 to fight the infringement claim.

Fortunately, Ms. Brooks’ case has a happy ending. Unable to afford the requisite legal fees, she received pro bono assistance from an intellectual property firm in Minneapolis. Her lawyers moved for summary judgment, or a dismissal, and Brooks Brothers finally dropped the suit after a year-long battle. Sadly, Ms. Brooks’ outcome is uncommon in the trademark world. All too often, small businesses relinquish their rightful brand identities in the face of large corporate threats. Here are six steps that you can take to spare your small business that fate.

Step 1: Do Your Homework

Before you adopt or register your trademark, perform a thorough search of the Internet and state and federal trademark databases to identify similar marks. A Google search can help you turn up similar marks, and searching databases like the Trademark Electronic Search System (TESS) will help you avert objections from registered trademark holders.

Consider the case of Robert Muller-Moore, a Vermont artist who attempted to trademark his “Eat More Kale” T-shirt company. Chick-fil-A, the restaurant behind the “Eat Mor Chikin” campaign, contacted Muller-Moore to demand that he withdraw his trademark application due to the likelihood of confusion.

This past December, the United States Patent and Trademark Office (USPTO) ended up approving Muller-Moore’s application. According to Muller-Moore, he hadn’t even heard of Chick-fil-A until the company contacted him. Had he done his due diligence in searching for extant marks, he might have avoided this lengthy and expensive hassle altogether.

Step 2: Use Your Mark

Entrepreneurs who have yet to secure federal trademark protection sometimes hesitate to use their mark for fear that it will be stolen. Ironically, not using a mark in commerce actually vitiates ownership rights, so don’t wait to put your mark out there once you’ve done your research. Even without federal registration, using a mark in commerce confers common law protection. This means that other companies, even with federal trademark registration, cannot use the mark in your geographic area if you were the first to use it in commerce in connection with the goods or services that it identifies.

Step 3: Consult a Trademark Attorney

Typically, entrepreneurs are strapped for cash and thus balk at the cost of hiring a trademark attorney. This attitude, while understandable, is a risky path to take. If a large company accuses you of infringement, you usually have three options: 1) abandon your mark, 2) change your mark and thereby lose some or all of its benefit, or 3) fight the claim in court.

Before you consider option #3, consider that trademark battles can cost hundreds of thousands of dollars. Moreover, Kenneth Port, director of the Intellectual Property Institute at William Mitchell College of Law, estimates that small companies entangled in trademark-bullying disputes prevail only 5.5 percent of the time. An experienced trademark attorney can help you forestall infringement claims altogether and give you trademark registration advice specific to entrepreneurs. The cost of hiring an attorney upfront pales in comparison to what you would pay for a protracted court battle.

Step 4: Register Your Mark

While unregistered marks have some protections under common law, federal registration confers benefits that startups can’t afford to sacrifice. Registration itself costs between $275 and $375, which is paltry in comparison to the following benefits:

Prevents the use or registration of the same or similar marks for related types of products and/or services

Puts companies nationwide on notice of the mark’s use and ownership, thereby depriving infringers of the ability to claim that their use of the mark was in good faith

Gives you national protection against infringement

Confers the right to use the ® symbol

Creates an evidentiary presumption of the mark’s validity, meaning that the burden of proving ownership shifts to the alleged infringer

Step 5: Police Your Mark

Once you have registered your trademark, you are responsible for enforcing the rights that flow from it; the USPTO will not do this for you. Some courts even regard a failure to police a trademark and prosecute infringement as evidence of abandonment, in which case the owner could lose ownership rights in the mark. For example, Anheuser-Busch’s failure to protest the use of the term “Budweiser” by DuBois Brewing for 35 years precluded the company from barring DuBois from using the term in connection with its beer in Anheuser-Busch v. DuBois Brewing Co. (1947).

To police your mark adequately, periodically conduct Internet searches for your mark. You might even set up a Google alert to receive an email anytime your mark or something similar appears online. You can also regularly check federal and common law trademark databases for newly filed trademark applications that may infringe upon your trademark rights. One of the many benefits of an attorney is that he/she can do this for you, possibly by setting up a trademark watch service.

Step 6: Know When to Raise the White Flag

Sometimes, no matter how many precautions a startup takes in protecting its mark, a trademark battle can still arise. When this happens, small businesses need to weigh the benefits associated with preserving their marks against the costs of pursuing litigation. At some point, settling out of court may be the financially prudent option as changing your mark may be necessary if you wish to keep your business. Situations like these are where legal counsel can prove invaluable.

With startups, how distinctive a product is in the marketplace can make or break the business’s viability, and a registered trademark safeguards that distinctiveness. Entrepreneurs can protect against major corporations with deep pockets bullying them into relinquishing their brand by implementing the six steps mentioned here.

By: Xavier Morales, Esq.

Xavier Morales, Esq. is a licensed trademark attorney. Mr. Morales founded his trademark law practice in January 2007 with the goal of providing intellectual property expertise to entrepreneurs and businesses around the country. Mr. Morales’ law practice emphasizes trademark registration, counseling and enforcement.

Read more about Mr Morales, and The Law Office of Xavier Morales here.